Packer gets no thanks for a fine year

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Publishing & Broadcasting yesterday delivered a bumper annual profit and doubled its dividend payment but it wasn't enough to satisfy shareholders who were hoping for a result above analysts' forecasts.

In a year that saw the company ride a buoyant advertising market, strengthen its position as Australia's dominant commercial television operator and make what has now become a successful bid for Perth casino Burswood, PBL boosted its bottom line by 75.4 per cent to $668.1 million.

Excluding one-off items that included a $182 million distribution from its investment in TV and film production company New Regency, actual net profit rose 36.3per cent to $484 million.

However, unhappy too that the company declined to give any firm guidance about trading conditions in the new financial year, shareholders pushed the stock down 8c to $13.56.

"It was hard to find any holes in the result," one analyst said.

"On virtually every level they were in line with expectations and they beat expectations on cash flow but share prices for most of the stocks [that have reported so far] have been underperforming if their results were in line with market expectations."

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The company declared a final fully franked dividend of 28c per share, up from 14c a year earlier, and payable on October 15, taking the total dividend to 43c.

PBL's TV division was the strongest performer, recording a 12.8 per cent rise in revenue to $862.8 million, and 28.7 per cent growth in earnings before interest, tax, depreciation and amortisation (EBITDA) to $280.1 million.

But magazines were also strong, up 7.5 per cent and 20.4 per cent, respectively.

Crown Casino's 13.5 per cent rise in EBITDA to $375.6 million was primarily due to an above theoretical VIP program win rate of 1.73 per cent that added $64.5 million to the business.

With its $667 million bid for Burswood almost complete, PBL's gaming and gambling revenues will jump to at least $1.58 billion this financial year, just below the combined revenues of the television and magazines divisions, now worth $1.6 billion.

But casinos could soon overtake PBL's media interests, especially if visits to casinos in the UK and Macau in the past year lead to more acquisitions.

PBL's chief executive, John Alexander, who took on the top job in June after the company sacked Peter Yates, denied PBL had been negotiating with anyone in Macau, despite reports executive chairman James Packer and Crown chief Rowen Craigie visited the former Portuguese colony in June.

Changes to China's gaming rules could transform Macau into the Las Vegas of the East, possibly damaging Crown's successful high-rolling business that has attracted gamblers from China and other parts of Asia.

"At the moment we are not actively seeking anything in Macau," Mr Alexander said.

"Having said that, it's obvious ... if you are interested in being in the gaming business anywhere in the world Macau is a wonderful opportunity," he said, adding it was too early to tell if two casinos that have opened this year in Macau would hurt the Australian industry.

The company had little to say publicly about the outlook for the current year. However, it told analysts not to expect 2004 earnings per share of 100.94c to be repeated this financial year.

Mr Alexander did say he expected the contribution from PBL's equity accounted businesses, such as internet portal ninemsn, to become a larger portion of total earnings in the medium term.

This year the division's contribution to net profit more than tripled to $7.4 million, including an equity accounted loss from PBL's 25 per cent stake in pay TV operator Foxtel of $27.2 million.